Ahead of the Curve

The lending environment is undergoing a worrying change. Funds that European direct lenders have raised but not yet deployed are at an all-time high and banks in most Western-European jurisdictions have renewed lending following years of reticence after the global financial crisis, leading to increased competition amongst lenders in the small and medium enterprise (SME) market.

European Commission seeks agreement on FTT by mid-2016

The European Commission hopes talks on a financial transaction tax (FTT) will conclude by summer next year, after Austria outlined the levy’s potential scope.

Pierre Moscovici, commissioner for financial affairs, hailed the progression of talks on how the tax would be applied, after the finance ministers of EU member states met for the Economic and Financial Affairs council (ECOFIN) on Tuesday.

Moscovici said the discussions, which focused on proposals tabled by the Austrian government, marked a “major step forward”.

ECOFIN discussed how to define the issuance and residence of securities under the FTT, and how to tax derivatives contracts.

It also debated the merits of taxing securities after each trade, or after the end of each trading day, according to documents released by the Council of the EU.

Details of potential FTT models have been drawn up by a standalone working party on tax questions, which, over the course of the year, has been discussing the “building blocks” associated with FTT models.

The European Trade Union Confederation welcomed the idea of proposals being finalised by summer 2016.

Deputy general secretary Veronica Nilsson said the ETUC would “continue to press for a strong FTT”, the proceeds of which, it argued, will be used to promote economic growth.

More recently, the number of countries supporting the FTT has fallen to 10, after Estonia withdrew its support, leaving Spain, Italy, Belgium, Austria, Portugal, Greece, Slovakia and Slovenia in addition to Germany and France.

PensionsEurope recently warned that the FTT would be “counter-productive” to efforts to foster investment on the Continent.